INDUSTRY ASSOCIATION

SPECIAL REPORT

THE IMPACTS OF PROPOSED TAX

Impact Report | 2017

LOSING LOCAL, LIVING-WAGE JOBS

Hospitals create local jobs that are especially critical in regions with weak local economies. 

The chart to the right shows the Portland Metro Area will lose the most jobs.

$71k
Median salary in hospital sector
Jobs Lost by Region (3% Tax) Share

An estimated 5,877 jobs will be lost

FROM THE 5th LARGEST SOURCE OF JOBS

Tax revenues will decrease by $27.6M

5% OF TOTAL CONTRIBUTIONS FROM THE SECTOR

Approximately 1 in 20 staff will be cut

RESULTING IN CUTS IN SERVICE PROVIDED
JOB LOSSES ARE CONCENTRATED IN PORTLAND METRO REGION

The map at the right shows the jobs losses projected in each county of Oregon. Jobs lost in rural areas will be particularly damaging to local economies, where hospitals are a principal job creator. 

1 in 20
Jobs in Oregon are associated with hospital operations.
Jobs Lost by County (3% Tax) Share
5
365
725
1,085
1,445
1,805

SUMMARY


A new tax being proposed on Oregon hospital revenues is intended to fill gaps in the State's Medicaid budget. While the exact rate of the proposed tax is still unknown, this report is assuming a rate of three percent. The proposed tax will have a dramatic effect on the Oregon economy and hospital workers, as well as on healthcare for Oregonians. Given the nature of the care that hospitals provide, operating margins are traditionally thin compared to other industries, meaning there is little excess revenue that is not immediately used for vital needs. 

KEY TAKEAWAYS 

SECTION ONE: JOBS AND ECONOMIC IMPACT 

SECTION TWO: IMPACT ON HEALTHCARE SERVICES

1. A Top 5 source of employment, hospitals are projected to shed 5% of current staff.

2. Job losses will be felt most heavily in urban areas and in rural, local economies.

1. Reductions in level of care will result nearly 1/2 of hospitals will now operate in the red.

2. Services will be disproportionately impacted in hospitals serving the needy.

JOBS AND ECONOMIC IMPACT

LOSSES IN JOBS, STATE AND LOCAL TAXES
REDUCTION IN ECONOMIC ACTIVITY GREATEST IN N. EAST OREGON

With total reduction in gross state product projected at more than $900 million, the loss in economic activity will be felt inside and outside the hospital sector.

$480M
In Gross State Product reduced
Reduction in Gross State Product by County (3% Tax) Share

IMPACT ON HEALTHCARE SERVICES

DISPROPORTIONATE IMPACTS ON THE NEEDY, BOTH RURAL AND URBAN
27
Hospitals will operate in the negative
47%
Of hospitals statewide will operate at a loss
-3.4%
Average operating margin across all hospitals

OPERATING IN THE RED MEANS REDUCTION IN CARE


As is, assuming a 3% tax, nearly one-half of Oregon hospitals will go from a positive operating to a negative margin.This will severely impact the ability of these institutions to maintain current care standards as well as utterly eliminate the option to expand operations or improve care through new investments either in the physical plant or personnel.

Urban Hospital Operating Margin Impact (6%) Share
Rural Hospital Operating Margin Impact (3%) Share
PENALIZING HOSPITALS SERVING THE NEEDY

The proposed tax will have the biggest impact on hospitals serving needier populations that simply cannot make as much money as other institutions. Mission-oriented hospitals would similarly suffer due to their inability to recover costs.

Under the proposed provider tax hospitals will have to reduce $355M in services

LOSSES IN SERVICES TO CHILDREN



From specialty care to family medicine, healthcare for children will be impacted.

IMPACTING MORTALITY, CHILD OBESITY, TRAUMA AND MORE.

LOSSES IN MATERNITY CARE



Expectant mothers will find more crowded birthing centers and fewer staff.

HEALTH OUTCOMES FOR PREGNANT WOMEN AND INFANTS WILL BE IMPACTED

LOSSES IN CARE FOR RETIREES



Retirees will see reductions in service levels for Medicare.

FEWER CAREGIVERS WILL MEAN LESS ACCESS AND LOWER QUALITY




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SOURCES AND NOTES
While the exact rate of the proposed tax is unknown, this report assumes as three percent tax.
Sources of data include the Bureau of Labor Statistics, the Bureau of Economic Analysis, and Apprise Health Insights. 
For more information on data sources click here.